I. Field of the Invention
The present invention generally relates to electronic data processing and to systems and methods for evaluating costs and measuring performance. More particularly, the invention relates to systems and methods that allow a user to model and evaluate any set of costed entities, such as business-related activities associated with running a business or developing and providing a product or service, or other costed entities such as resources, personnel, products, parts or raw materials.
II. Background Information
The success of an organization is often tied to its ability to perform and effectively implement business processes. To achieve success and provide value to customers, an organization will often analyze its business-related activities and other costed entites to achieve maximum performance and value. Business process analysis is one way to improve business processes. Such an analysis may involve measuring, evaluating, and optimizing business process performance. By analyzing its processes and use of resources, a company can better identify factors contributing to revenue loss and/or optimize its deployment of resources.
In the business world, different methodologies exist for evaluating costs and measuring performance. By way of example, concurrent costing is one methodology for planning, monitoring, and optimizing the costs of a new product or service. Concurrent costing may be performed during the planning, designing, and/or offer phases. By performing a concurrent costing simulation at an early phase of a product's or service's life cycle, a business may estimate and ultimately control the real costs associated with producing or offering the product or service.
The process of analyzing costs across different costed entities is known as a value chain analysis. To perform a value chain analysis, actual or hypothetical entities may be modeled to determine the costs associated with the modeled entities. The costed entities may encompass any set of business-related activities, or any other valuated entity such as resources, personnel, products, parts or raw materials. Modeling and analyzing the costs associated with a set of business-related activities, such as designing and manufacturing a product, may be a critical aspect of bringing that product to market. The same can also be said for designing and offering a service.
To determine costs and measure, businesses often use software or computerized modeling tools. By using modeling software, a business can simulate, beforehand, the expected costs associated with costed entities. In doing so, the business is able to anticipate and plan for the costs throughout all phases of design and production. In addition, by simulating expected costs, it is possible to vary and control actual costs, such as the cost of materials or labor. For instance, by varying the choice of materials, a business can determine the affect of substituting one material for another.
Conventional modeling tools, such as those provided with enterprise resource planning (ERP) systems, typically implement specific methodologies and structures to model and process a value chain. For example, in ERP systems of SAP AG (Walldorf, Germany), there are numerous components in the Controlling (CO) module for processing costed entities, such as Overhead Management (CO-OM), Profitability Analysis (CO-PA) and Product Costing (CO-PC). These components use different methods and structures to model and process a value chain (e.g., assessments and activity allocations in CO-OM, top-down distribution in CO-PA, hierarchical costing structures in CO-PC, etc.). As a result, existing solutions may perform functionality that only encompass part of the process necessary to perform a complete value chain analysis. Moreover, due to the diversity in these types of modeling tools, it is often difficult to analyze relationships between the results from one software component and another.
Businesses are also limited by the way modeling tools are hard-coded or programmed. For example, a software module may only allow a business to vary specific parameters or restrict a user from adding great levels of detail. In addition, because pre-existing software modules are often designed for use by a variety of businesses, such solutions may not address the varied concerns that different businesses may have when determining the cost of bringing a particular product or service to market. For example, a modeling tool might not consider that what might work well for a small business, might be ill suited for a larger business. Instead, the software modules are designed with a one size fits all approach. Consequently, software modules with such a design approach do not allow a particular business to configure the simulation process(i.e., to vary the metadata) to take into account a particular business' needs. Furthermore, the flexibility of costing operation applications varies, and considerable effort may often be required to incorporate new logistical concepts and objects.
Therefore, conventional software tools and computerized systems are limited and suffer from one or more drawbacks. Such solutions are typically not compatible or flexible enough to permit a complete value chain analysis across different components. In addition, because these solutions are not configurable, they are not re-usable and do not take into consideration the needs of particular businesses or end users.
In view of the foregoing, there is a need for improved systems and methods for modeling costed entities and performing a value chain analysis. For example, there is a need for a consistent approach or platform for modeling costed entities. There is also a need for systems and methods for performing a value chain analysis that allow a business to customize or modify the process to meet its unique needs. There is also a need for systems and methods which are both re-useable and flexible, and enable a user to model and analyze costs and measure performance across different costed entities.